Bile Mohamoud Qabowsade, a spokesman for the information ministry in the breakaway region of Puntland said: "Twenty civilians ... have been killed and eighty others wounded, some of them seriously when violent people targeted them with heavy explosions near the seaport in Bosaso."
Bosaso, is in Somalia's self-declared autonomous region of Puntland.
Most of those killed were Ethiopians believed to be on their way to find work in the Arab Peninsula which lies across the Gulf of Eden.
Worst attack
Hospital officials described it as one of the worst attacks in Puntland and said the number of wounded was higher.
"We received about 90 wounded people and so far some of them died in the hospital," said Mohamed Yusuf from Bosaso's main hospital.
"It seems that the hospital had the busiest night and largest number of wounded people in a single incident," he said.
A witness told news agencies that residents were horrified by the carnage left from the explosions.
"We got tired as we collected the charred bodies and seriously injured people through the night," said Osman Sheik Weheliye.
Local officials said they were unsure why Ethiopians were targeted in the attack.
Ethiopia and Somalia have a long history of tense and, at times, violent relations.
Ethiopian troops are currently propping up a shaky UN-backed government in the southern part of the country.
Puntland, unlike the south of the country, has been relatively peaceful since Somalia's last functioning government collapsed in a 1991 revolt, leaving rival warlords to turn on each other and divide the nation among squabbling clans.